Select the INCORRECT statement from the below given statements.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Nominal Share Capital is a part of Authorized Share Capital

The categories of share capital sit one inside another: authorised (also called nominal or registered) → issued and unissued → subscribed and unsubscribed → called up and uncalled. Nominal capital is another name for authorised capital, not a part of it, so statement (1) is the incorrect one.

Option (2) Un-issued Share Capital is a part of Authorized Share Capital — A true statement. The authorised capital not offered to the public is the unissued capital.

Option (3) Un-Subscribed Share Capital is a part of Issued Share Capital — A true statement. Subscribed capital is the part of issued capital taken up by the public; the part not taken up is unsubscribed, and both together make up issued capital.

Option (4) Called up Share Capital is a part of Subscribed Share Capital — A true statement. The company calls up only on shares already subscribed.

NCERT (2026-27 edition):
Categories of Share Capital – “… Authorised Capital: Authorised capital is the amount of share capital which a company is authorised to issue by its Memorandum of Association. The company cannot raise more than the amount of capital as specified in the Memorandum of Association. It is also called Nominal or Registered capital.”

NCERT (2026-27 edition):
Categories of Share Capital – “… Issued Capital: It is that part of the authorised capital which is actually issued to the public for subscription including the shares allotted to vendors and the signatories to the company’s memorandum. The authorised capital which is not offered for public subscription is known as ‘unissued capital’.”

NCERT (2026-27 edition):
Categories of Share Capital – “… Subscribed Capital: It is that part of the issued capital which has been actually subscribed by the public.”

NCERT (2026-27 edition):
Categories of Share Capital – “… Called up Capital: It is that part of the subscribed capital which has been called up on the shares, i.e., what the company has asked the shareholders to pay.”